Delhi High Court – Orders
Superb Cooling Towers Pvt Ltd vs Special Commissioner , Department Of … on 4 March, 2025
Author: Yashwant Varma
Bench: Yashwant Varma
$~72
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 2738/2025
SUPERB COOLING TOWERS PVT LTD .....Petitioner
Through: Mr. K.C. Dubey, Mr. R.K.
Dagur and Mr. V.K. Attri,
Advs.
versus
SPECIAL COMMISSIONER , DEPARTMENT OF TRADE
AND TAXES AND ANR. .....Respondents
Through: Ms. Urvi Mohan, Adv. for R-1
and R-2.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
ORDER
% 04.03.2025
CM APPL. 13087/2025 (Ex.)
1. Allowed, subject to all just exceptions.
2. The application shall stand disposed of.
W.P.(C) 2738/2025
3. This writ petition has been preferred seeking the following
reliefs:-
“a) A Writ of Certiorari under Article 226/227 of the
Constitution of India quashing/set aside the impugned order
dated 14.01.2025 and order dated 25.08.2023 passed by the
Respondent to the extent of cancellation of registration ab
initio and in furtherance thereof cancelling the GST
registration w.e.f., 01.07.2017; or/and
b) Without prejudice, a Writ of Mandamus under Article
226/227 of the Constitution of India directing the Respondent
to cancel the GST registration no 07ATWPS6223L1ZU w.e.f,
31.03 .2022; or/and
c) pass such any other order which this Hon’ble Court may
deem fit and proper in the facts and circumstances of the case.”
4. Insofar as the dismissal of the appeal preferred by the writ
petitioner under Section 107 of the Central Goods and Services Tax
W.P.(C) 2738/2025 Page 1 of 7
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Act, 2017 is concerned, we bear in mind the principles laid down by
us in Addichem Speciallity LLP v. Special Commissioner I,
Department of Trade and Taxes and Anr.1 and where we had held
that the maximum time period which stands comprised in the statute
cannot be extended by imputing the general principles of the
Limitation Act, 1963. We thus find no error in the order passed by the
appellate authority.
5. However, and insofar as the retrospective cancellation of the
Goods and Services Tax2 registration of the writ petitioner is
concerned, we bear in mind the following principles which we had
laid down in Riddhi Siddhi Enterprises v. Commissioner of Goods
and Services Tax (CGST), South Delhi & Anr.3:
“5. As is manifest from a reading of Section 29, clauses (a) to (e) of
Section 29(2) constitute independent limbs on the basis of which a
registration may warrant cancellation. While the provision does enable
the respondents to cancel that registration with retrospective effect, the
mere existence or conferral of that power would not justify a
revocation of registration. The order under Section 29(2) must itself
reflect the reasons which may have weighed upon the respondents to
cancel registration with retrospective effect. Given the deleterious
consequences which would ensue and accompany a retroactive
cancellation makes it all the more vital that the order be reasoned and
demonstrative of due application of mind. It is also necessary to
observe that the mere existence of such a power would not in itself be
sufficient to sustain its invocation. What we seek to emphasise is that
the power to cancel retrospectively can neither be robotic nor
routinely applied unless circumstances so warrant. When tested on the
aforesaid precepts it becomes ex facie evident that the impugned order
of cancellation cannot be sustained.
6. We note that while dealing with the right of the respondents to
cancel GST registration with retrospective effect and the manner in
which such power should be exercised in accordance with the
statutory scheme was an issue which was noticed in Ramesh
Chander vs Assistant Commissioner of Goods and Services Tax,1
2025 SCC OnLine Del 646
2
GST
3
W.P.C 8061/2024 dated 25 September 2024W.P.(C) 2738/2025 Page 2 of 7
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Dwarka Division, CGST Delhi & Anr. The Court in Ramesh
Chander taking note of the contours of Section 29 had held:-
“1. The petitioner impugns order in appeal dated 29.12.2023,
whereby the appeal filed by the petitioner has been dismissed
solely on the ground of limitation. Petitioner had filed the
appeal impugning order dated 13.07.2022 whereby the GST
registration of the petitioner was cancelled retrospectively
with effect from 01.07.2017. Petitioner also impugns Show
Cause Notice dated 07.04.2022.
2. Vide impugned Show Cause Notice dated 07.04.2022,
petitioner was called upon to show cause as to why the
registration be not cancelled for the following reasons:-
“Any Taxpayer other than composition taxpayer has
not filed returns for a continuous period of six
months”
3. Petitioner was in the business of services involving repair,
alterations, additions, replacements, renovation, maintenance
or remodelling of the building covered above, General
construction services of harbours, waterways, dams, water
mains and lines, irrigation and other waterworks, General
construction services of long-distance underground/ overland/
submarine pipelines, communication and electric power lines
(cables); pumping stations and related works; transformer
stations and related works, General construction services of
local water & sewage pipelines, electricity and
communication cables & related works, Installation,
assembly and erection services of other prefabricated
structures and constructions and possessed a GST
registration.
4. A show cause notice was issued to the petitioner on
07.04.2022 Though the notice does not specify any cogent
reason, there is an observation in the notice stating failure to
furnish returns for a continuous period of six months. The
show cause notice requires the petitioner to appear before the
undersigned i.e. authority issuing the notice. Notice does not
give the name of the officer or place or time where the
petitioner has to appear.
5. Further the order dated 13.07.2022 passed on the show
cause notice does not give any reasons for cancellation of the
registration. It, however, states that the registration is liable to
be cancelled for the following reason “whereas no reply to
notice to show cause has been submitted”. However, the said
order in itself is contradictory, the order states “reference to
your reply dated 16.04.2022 in response to the notice to show
cause dated 07.04.2022” and the reason stated for
cancellation is “whereas no reply to notice to show cause has
W.P.(C) 2738/2025 Page 3 of 7
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been submitted”. The order further states that effective date of
cancellation of registration is 01.07.2017 i.e. retrospective
date.
6. Neither the show cause notice, nor the order spell out the
reasons for retrospective cancellation. In fact, in our view,
order dated 13.07.2022 does not qualify as an order of
cancellation of registration.
7. As per the petitioner, the said order reflected that the GST
of the Petitioner stands cancelled from 01.07.2017 even
though returns thereafter have been filed by the Petitioner.
8. We notice that the show cause notice as well as the
impugned order of cancellation, are themselves vitiated on
account of lack of reason and clarity. The appeal has been
dismissed solely on the ground of limitation. Since the very
foundation of entire proceedings i.e. show cause notice and
the order of cancellation are vitiated, we are of the view that
no purpose would be served in relegating the petitioner to the
stage of an appeal.
9. In terms of Section 29(2) of the Central Goods and
Services Tax Act, 2017, the proper officer may cancel the
GST registration of a person from such date including any
retrospective date, as he may deem fit if the circumstances set
out in the said sub-section are satisfied. The registration
cannot be cancelled with retrospective effect mechanically. It
can be cancelled only if the proper officer deems it fit to do
so. Such satisfaction cannot be subjective but must be based
on some objective criteria. Merely, because a taxpayer has
not filed the returns for some period does not mean that the
taxpayer’s registration is required to be cancelled with
retrospective date also covering the period when the returns
were filed and the taxpayer was compliant.
10. It is important to note that, according to the respondent,
one of the consequences for cancelling a tax payer’s
registration with retrospective effect is that the taxpayer’s
customers are denied the input tax credit availed in respect of
the supplies made by the tax payer during such period.
Although, we do not consider it apposite to examine this
aspect but assuming that the respondent’s contention in this
regard is correct, it would follow that the proper officer is
also required to consider this aspect while passing any order
for cancellation of GST registration with retrospective effect.
Thus, a taxpayer’s registration can be cancelled with
retrospective effect only where such consequences are
intended and are warranted.
11. The show cause notice does not even state that the
registration is liable to be cancelled from a retrospective date.
W.P.(C) 2738/2025 Page 4 of 7
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12. The petition is allowed. The impugned show cause notice
dated 07.04.2022, order of cancellation dated 13.07.2022 and
the order in appeal dated 29.12.2023 are accordingly set
aside. GST registration of the petitioner is restored, subject to
petitioner filing requisite returns upto date.
13. It is clarified that since the petitioner could not have filed
the return after the GST registration was suspended, there
shall be no liability to pay any penalty or fine for delayed
filing. However, this would only apply in case petitioner files
an affidavit of undertaking that petitioner has not carried out
any business or raised invoices or taken any Input Tax Credit
after the registration was suspended with effect from
07.04.2022 i.e., the date of suspension of the registration.
14. Respondent would be at liberty to initiate appropriate
proceedings in accordance with law after giving a proper
show cause notice containing complete details, if so advised.
Further this order would not preclude the respondent from
initiating any steps in accordance with law, if it is found that
the petitioner had violated any provisions of the Act.
15. Petition is disposed of in the above terms.”
7. We further take note of the judgment in Delhi Polymers vs
Commissioner, Trade and Taxes & Anr. wherein the following was
observed:-
“1.Petitioner has filed the appeal impugning order of
cancellation of registration dated 15.12.2021 whereby the GST
registration of the Petitioner has been cancelled retrospectively
with effect from 01.07.2017. Petitioner also impugns Show
Cause Notice dated 04.09.2021.
2. Vide Show Cause Notice dated 04.09.2021, petitioner was
called upon to show cause as to why the registration be not
cancelled for the following reason:-
“Collects any amount representing the tax but fails to
pay the same to the account of the Central/State
Government beyond a period of three months from the
date on which such payment becomes due”
3. Petitioner was engaged in the business of Sanitary ware
Products & Accessories i.e., Baths, Shower, Washbasins, Seats
and Cover etc. and possessed GST registration.
4. Show Cause Notice dated 04.09.2021 was issued to the
Petitioner seeking to cancel its registration. However, the
Show Cause Notice also does not put the petitioner to notice
that the registration is liable to be cancelled retrospectively.
Accordingly, the petitioner had no opportunity to even object
to the retrospective cancellation of the registration.
W.P.(C) 2738/2025 Page 5 of 7
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5. Further, the impugned order dated 15.12.2021 passed on the
Show Cause Notice dated 04.09.2021 does not give any
reasons for cancellation. It, however, states that the registration
is liable to be cancelled for the following reason “whereas no
reply to the show cause notice has been submitted”. However,
the said order in itself is contradictory. The order states
“reference to your reply dated 15.12.2021 in response to the
notice to show cause dated 04.09.2021” and the reason stated
for the cancellation is “whereas no reply to notice show cause
has been submitted”. The order further states that effective date
of cancellation of registration is 01.07.2017 i.e., a retrospective
date.
6. Neither the show cause notice, nor the order spell out the
reasons for retrospective cancellation. In fact, in our view,
order dated 15.12.2021 does not qualify as an order of
cancellation of registration. On one hand, it states that the
registration is liable to be cancelled and on the other, in the
column at the bottom there are no dues stated to be due against
the petitioner and the table shows nil demand.
7. Learned Counsel for the Petitioner submits that the said
order reflected that the GST registration of petitioner stands
cancelled from 01.07.2017 even though returns thereafter have
been filed by the Petitioner.
8. He further submits that the petitioner is no longer interested
in continuing the business and the business has been
discontinued.
9. In terms of Section 29(2) of the Act, the proper officer may
cancel the GST registration of a person from such date
including any retrospective date, as he may deem fit if the
circumstances set out in the said sub-section are satisfied.
Registration cannot be cancelled with retrospective effect
mechanically. It can be cancelled only if the proper officer
deems it fit to do so. Such satisfaction cannot be subjective but
must be based on some objective criteria. Merely, because a
taxpayer has not filed the returns for some period does not
mean that the taxpayer’s registration is required to be cancelled
with retrospective date also covering the period when the
returns were filed and the taxpayer was compliant.
10. It is important to note that, according to the respondent,
one of the consequences for cancelling a tax payer’s
registration with retrospective effect is that the taxpayer’s
customers are denied the input tax credit availed in respect of
the supplies made by the tax payer during such period.
Although, we do not consider it apposite to examine this aspect
but assuming that the respondent’s contention in required to
consider this aspect while passing any order for cancellation of
W.P.(C) 2738/2025 Page 6 of 7
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
The Order is downloaded from the DHC Server on 08/03/2025 at 02:10:14
GST registration with retrospective effect. Thus, a taxpayer’s
registration can be cancelled with retrospective effect only
where such consequences are intended and are warranted.
11. It may be further noted that both the Petitioners and the
department want cancellation of the GST registration of the
Petitioner, though for a different reason.
12. In view of the fact that Petitioner does not seek to carry on
business or continue the registration, the impugned order dated
15.12.2021 is modified to the limited extent that registration
shall now be treated as cancelled with effect from 04.09.2021
i.e., the date when the Show Cause Notice was issued.
13. It is clarified that Respondents are also not precluded from
taking any steps for recovery of any tax, penalty or interest that
may be due in respect of the subject firm in accordance with
law.
14. Petition is accordingly disposed of in the above terms.”
8. In view of the aforesaid and in light of an abject failure on the part
of the authority to assign even rudimentary reasons for a retroactive
cancellation, we find ourselves unable to sustain the order impugned.”
6. We, consequently, and in light of the apparent failure on the
part of respondents to have indicated an intent to cancel the
registration with retrospective effect, find ourselves unable to sustain
the impugned order to the aforesaid extent.
7. We accordingly allow the writ petition by modifying the
impugned order and providing that the cancellation of the petitioner’s
GST registration shall come into effect from the date of the Show
Cause Notice, i.e. 9 December 2022.
8. The stipulation in the impugned order of cancellation to come
into effect from 01 July 2017 is consequently quashed. The petition
shall stand disposed of on the aforesaid terms.
YASHWANT VARMA, J.
HARISH VAIDYANATHAN SHANKAR, J.
MARCH 04, 2025/nd
W.P.(C) 2738/2025 Page 7 of 7
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
The Order is downloaded from the DHC Server on 08/03/2025 at 02:10:14